Title 4 — Business and Commercial Law
88 chapters · 1,044 sections in this title.
Ark. Code Ann. § 4-4-210 Security interest of collecting bank in items, accompanying documents, and proceeds
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(a) A collecting bank has a security interest in an item and any accompanying documents or the proceeds of either:(1) in case of an item deposited in an account, to the extent to which credit given for the item has been withdrawn or applied;(2) in case of an item for which it has…
Ark. Code Ann. § 4-4-211 When bank gives value for purposes of holder in due course
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For purposes of determining its status as a holder in due course, a bank has given value to the extent it has a security interest in an item, if the bank otherwise complies with the requirements of § 4-3-302 on what constitutes a holder in due course.
Ark. Code Ann. § 4-4-212 Presentment by notice of item not payable by, through, or at bank — Liability of drawer or indorser
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(a) Unless otherwise instructed, a collecting bank may present an item not payable by, through, or at a bank by sending to the party to accept or pay a record providing notice that the bank holds the item for acceptance or payment. The notice must be sent in time to be received o…
Ark. Code Ann. § 4-4-213 Medium and time of settlement by bank
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(a) With respect to settlement by a bank, the medium and time of settlement may be prescribed by Federal Reserve regulations or circulars, clearinghouse rules, and the like, or agreement. In the absence of such prescription:(1) the medium of settlement is cash or credit to an acc…
Ark. Code Ann. § 4-4-214 Right of charge-back or refund — Liability of collecting bank — Return of item
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(a) If a collecting bank has made provisional settlement with its customer for an item and fails by reason of dishonor, suspension of payments by a bank, or otherwise to receive settlement for the item which is or becomes final, the bank may revoke the settlement given by it, cha…
Ark. Code Ann. § 4-4-215 Final payment of item by payor bank — When provisional debits and credits become final — When certain credits become available for withdrawal
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(a) An item is finally paid by a payor bank when the bank has first done any of the following:(1) paid the item in cash;(2) settled for the item without having a right to revoke the settlement under statute, clearinghouse rule, or agreement; or(3) made a provisional settlement fo…
Ark. Code Ann. § 4-4-216 Insolvency and preference
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(a) If an item is in or comes into the possession of a payor or collecting bank that suspends payment and the item has not been finally paid, the item must be returned by the receiver, trustee, or agent in charge of the closed bank to the presenting bank or the closed bank's cust…
Ark. Code Ann. § 4-4-301 Deferred posting — Recovery of payment by return of items — Time of dishonor — Return of items by payor bank
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(a) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made f…
Ark. Code Ann. § 4-4-302 Payor bank's responsibility for late return of item
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(a) If an item is presented to and received by a payor bank, the bank is accountable for the amount of:(1) a demand item, other than a documentary draft, whether properly payable or not, if the bank, in any case in which it is not also the depositary bank, retains the item beyond…
Ark. Code Ann. § 4-4-303 When items subject to notice, stop-payment order, legal process, or setoff — Order in which items may be charged or certified
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(a) Any knowledge, notice, or stop-payment order received by, legal process served upon, or setoff exercised by a payor bank comes too late to terminate, suspend, or modify the bank's right or duty to pay an item or to charge its customer's account for the item if the knowledge, …
Ark. Code Ann. § 4-4-401 When bank may charge customer's account
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(a) A bank may charge against the account of a customer an item that is properly payable from that account even though the charge creates an overdraft. An item is properly payable if it is authorized by the customer and is in accordance with any agreement between the customer and…
Ark. Code Ann. § 4-4-402 Bank's liability to customer for wrongful dishonor — Time of determining insufficiency of account
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(a) Except as otherwise provided in this chapter, a payor bank wrongfully dishonors an item if it dishonors an item that is properly payable, but a bank may dishonor an item that would create an overdraft unless it has agreed to pay the overdraft. (b) A payor bank is liable to it…
Ark. Code Ann. § 4-4-403 Customer's right to stop payment — Burden of proof of loss
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(a) A customer or any person authorized to draw on the account if there is more than one person may stop payment of any item drawn on the customer's account or close the account by an order to the bank describing the item or account with reasonable certainty received at a time an…
Ark. Code Ann. § 4-4-404 Bank not obliged to pay check more than six (6) months old
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A bank is under no obligation to a customer having a checking account to pay a check, other than a certified check, which is presented more than six (6) months after its date, but it may charge its customer's account for a payment made thereafter in good faith.
Ark. Code Ann. § 4-4-405 Death or incompetence of customer
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(a) A payor or collecting bank's authority to accept, pay, or collect an item or to account for proceeds of its collection, if otherwise effective, is not rendered ineffective by incompetence of a customer of either bank existing at the time the item is issued or its collection i…
Ark. Code Ann. § 4-4-406 Customer's duty to discover and report unauthorized signature or alteration — Comparative fault
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(a) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonab…
Ark. Code Ann. § 4-4-407 Payor bank's right to subrogation on improper payment
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(1) If a payor bank has paid an item over the order of the drawer or maker to stop payment, or after an account has been closed, or otherwise under circumstances giving a basis for objection by the drawer or maker, to prevent unjust enrichment and only to the extent necessary to …
Ark. Code Ann. § 4-4-501 Handling of documentary drafts — Duty to send for presentment and to notify customer of dishonor
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A bank that takes a documentary draft for collection shall present or send the draft and accompanying documents for presentment and, upon learning that the draft has not been paid or accepted in due course, shall seasonably notify its customer of the fact even though it may have …
Ark. Code Ann. § 4-4-502 Presentment of “on arrival” drafts
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If a draft or the relevant instructions require presentment “on arrival”, “when goods arrive” or the like, the collecting bank need not present until in its judgment a reasonable time for arrival of the goods has expired. Refusal to pay or accept because the goods have not arrive…
Ark. Code Ann. § 4-4-503 Responsibility of presenting bank for documents and goods — Report of reasons for dishonor — Referee in case of need
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(1) Unless otherwise instructed and except as provided in Chapter 5 of this subtitle, a bank presenting a documentary draft:(1) must deliver the documents to the drawee on acceptance of the draft if it is payable more than three (3) days after presentment; otherwise, only on paym…
Ark. Code Ann. § 4-4-504 Privilege of presenting bank to deal with goods — Security interest for expenses
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(a) A presenting bank that, following the dishonor of a documentary draft, has seasonably requested instructions but does not receive them within a reasonable time may store, sell, or otherwise deal with the goods in any reasonable manner. (b) For its reasonable expenses incurred…
Ark. Code Ann. § 4-5-101 Short title
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This chapter may be cited as Uniform Commercial Code—Letters of Credit.
Ark. Code Ann. § 4-5-102 Definitions
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(a) In this chapter:(1) “Adviser” means a person who, at the request of the issuer, a confirmer, or another adviser, notifies or requests another adviser to notify the beneficiary that a letter of credit has been issued, confirmed, or amended.(2) “Applicant” means a person at who…
Ark. Code Ann. § 4-5-103 Scope
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(a) This chapter applies to letters of credit and to certain rights and obligations arising out of transactions involving letters of credit. (b) The statement of a rule in this chapter does not by itself require, imply, or negate application of the same or a different rule to a s…
Ark. Code Ann. § 4-5-104 Formal requirements. [Effective until September 1, 2026.]
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A letter of credit, confirmation, advice, transfer, amendment, or cancellation may be issued in any form that is a record and is authenticated (i) by a signature or (ii) in accordance with the agreement of the parties or the standard practice referred to in § 4-5-108(e).
Ark. Code Ann. § 4-5-105 Consideration
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Consideration is not required to issue, amend, transfer, or cancel a letter of credit, advice, or confirmation.
Ark. Code Ann. § 4-5-106 Issuance, amendment, cancellation, and duration
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(a) A letter of credit is issued and becomes enforceable according to its terms against the issuer when the issuer sends or otherwise transmits it to the person requested to advise or to the beneficiary. A letter of credit is revocable only if it so provides. (b) After a letter o…
Ark. Code Ann. § 4-5-107 Confirmer, nominated person, and adviser
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(a) A confirmer is directly obligated on a letter of credit and has the rights and obligations of an issuer to the extent of its confirmation. The confirmer also has rights against and obligations to the issuer as if the issuer were an applicant and the confirmer had issued the l…
Ark. Code Ann. § 4-5-108 Issuer's rights and obligations
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(a) Except as otherwise provided in § 4-5-109, an issuer shall honor a presentation that, as determined by the standard practice referred to in subsection (e) of this section, appears on its face strictly to comply with the terms and conditions of the letter of credit. Except as …
Ark. Code Ann. § 4-5-109 Fraud and forgery
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(a) If a presentation is made that appears on its face strictly to comply with the terms and conditions of the letter of credit, but a required document is forged or materially fraudulent, or honor of the presentation would facilitate a material fraud by the beneficiary on the is…
Ark. Code Ann. § 4-5-110 Warranties
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(a) If its presentation is honored, the beneficiary warrants:(1) to the issuer, any other person to whom presentation is made, and the applicant that there is no fraud or forgery of the kind described in § 4-5-109(a); and(2) to the applicant that the drawing does not violate any …
Ark. Code Ann. § 4-5-111 Remedies
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(a) If an issuer wrongfully dishonors or repudiates its obligation to pay money under a letter of credit before presentation, the beneficiary, successor, or nominated person presenting on its own behalf may recover from the issuer the amount that is the subject of the dishonor or…
Ark. Code Ann. § 4-5-112 Transfer of letter of credit
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(a) Except as otherwise provided in § 4-5-113, unless a letter of credit provides that it is transferable, the right of a beneficiary to draw or otherwise demand performance under a letter of credit may not be transferred. (b) Even if a letter of credit provides that it is transf…
Ark. Code Ann. § 4-5-113 Transfer by operation of law
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(a) A successor of a beneficiary may consent to amendments, sign and present documents, and receive payment or other items of value in the name of the beneficiary without disclosing its status as a successor. (b) A successor of a beneficiary may consent to amendments, sign and pr…
Ark. Code Ann. § 4-5-114 Assignment of proceeds
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(a) In this section, “proceeds of a letter of credit” means the cash, check, accepted draft, or other item of value paid or delivered upon honor or giving of value by the issuer or any nominated person under the letter of credit. The term does not include a beneficiary's drawing …
Ark. Code Ann. § 4-5-115 Statute of limitations
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An action to enforce a right or obligation arising under this chapter must be commenced within one (1) year after the expiration date of the relevant letter of credit or one (1) year after the cause of action accrues, whichever occurs later. A cause of action accrues when the bre…
Ark. Code Ann. § 4-5-116 Choice of law and forum. [Effective until September 1, 2026.]
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(a) The liability of an issuer, nominated person, or adviser for action or omission is governed by the law of the jurisdiction chosen by an agreement in the form of a record signed or otherwise authenticated by the affected parties in the manner provided in § 4-5-104 or by a prov…
Ark. Code Ann. § 4-5-117 Subrogation of issuer, applicant, and nominated person
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(a) An issuer that honors a beneficiary's presentation is subrogated to the rights of the beneficiary to the same extent as if the issuer were a secondary obligor of the underlying obligation owed to the beneficiary and of the applicant to the same extent as if the issuer were th…
Ark. Code Ann. § 4-5-118 Security interest of issuer or nominated person
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(a) An issuer or nominated person has a security interest in a document presented under a letter of credit to the extent that the issuer or nominated person honors or gives value for the presentation. (b) So long as and to the extent that an issuer or nominated person has not bee…
Ark. Code Ann. § 4-5-119 Applicability
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This chapter applies to a letter of credit that is issued on or after August 1, 1997. This chapter does not apply to a transaction, event, obligation, or duty arising out of or associated with a letter of credit that was issued before August 1, 1997.
Ark. Code Ann. § 4-5-120 Savings clause
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A transaction arising out of or associated with a letter of credit that was issued before August 1, 1997 and the rights, obligations, and interests flowing from that transaction are governed by any statute or other law amended or repealed by this chapter as if repeal or amendment…
Ark. Code Ann. § 4-7-101 Short title
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This chapter may be cited as Uniform Commercial Code — Documents of Title.
Ark. Code Ann. § 4-7-102 Definitions and index of definitions. [Effective until September 1, 2026.]
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(a) In this Chapter, unless the context otherwise requires:(1) “Bailee” means a person that by a warehouse receipt, bill of lading, or other document of title acknowledges possession of goods and contracts to deliver them.(2) “Carrier” means a person that issues a bill of lading.…
Ark. Code Ann. § 4-7-103 Relation of chapter to treaty or statute
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(a) This chapter is subject to any treaty or statute of the United States or regulatory statute of this state to the extent the treaty, statute, or regulatory statute is applicable. (b) This chapter does not modify or repeal any law prescribing the form or content of a document o…
Ark. Code Ann. § 4-7-104 Negotiable and nonnegotiable document of title
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(a) Except as otherwise provided in subsection (c), a document of title is negotiable if by its terms the goods are to be delivered to bearer or to the order of a named person. (b) A document of title other than one described in subsection (a) is nonnegotiable. A bill of lading t…
Ark. Code Ann. § 4-7-105 Reissuance in alternative medium
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(a) Upon request of a person entitled under an electronic document of title, the issuer of the electronic document may issue a tangible document of title as a substitute for the electronic document if:(1) the person entitled under the electronic document surrenders control of the…
Ark. Code Ann. § 4-7-106 Control of electronic document of title. [Effective until September 1, 2026.]
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(a) A person has control of an electronic document of title if a system employed for evidencing the transfer of interests in the electronic document reliably establishes that person as the person to which the electronic document was issued or transferred. (b) A system satisfies s…
Ark. Code Ann. § 4-7-201 Person that may issue a warehouse receipt — Storage under bond
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(a) A warehouse receipt may be issued by any warehouse. (b) If goods, including distilled spirits and agricultural commodities, are stored under a statute requiring a bond against withdrawal or a license for the issuance of receipts in the nature of warehouse receipts, a receipt …
Ark. Code Ann. § 4-7-202 Form of warehouse receipt — Effect of omission
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(a) A warehouse receipt need not be in any particular form. (b) Unless a warehouse receipt provides for each of the following, the warehouse is liable for damages caused to a person injured by its omission:(1) a statement of the location of the warehouse facility where the goods …
Ark. Code Ann. § 4-7-203 Liability for nonreceipt or misdescription
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(1) A party to or purchaser for value in good faith of a document of title, other than a bill of lading, that relies upon the description of the goods in the document may recover from the issuer damages caused by the nonreceipt or misdescription of the goods, except to the extent…